The GST system in India requires the recipient of goods or services to match the invoices uploaded by the supplier in GSTR-1 with the invoices auto-populated in GSTR-2A. If there is a mismatch between GSTR-2A and GSTR-3B, the recipient may not be able to claim input tax credit (ITC) on such invoices.
However, the government has provided some relief to recipients in case of GSTR-2A vs GSTR-3B mismatch. Here are the details:
Recipient can claim provisional credit: If the supplier has uploaded the invoice in GSTR-1 but has not paid the tax or has not filed GSTR-3B, the recipient can claim provisional credit up to a maximum of 20% of the eligible ITC on such invoices. This means that the recipient can claim 20% of the ITC even if the supplier has not paid the tax or has not filed GSTR-3B.
GSTR-2B for easier reconciliation: The government has introduced GSTR-2B, which is an auto-drafted ITC statement for a recipient. GSTR-2B contains details of all the invoices uploaded by the supplier in GSTR-1, which makes it easier for the recipient to reconcile the invoices with their own records.
Action against defaulting supplier: The government has also taken steps to ensure that the supplier files their GSTR-1 and GSTR-3B on time. If the supplier fails to file their returns, they will be liable to pay late fees and penalties. The government can also take other actions, such as blocking the e-way bill generation, suspending their GST registration, or even initiating recovery proceedings.
It is important for businesses to ensure that they reconcile their GSTR-2A with GSTR-3B and claim ITC only on eligible invoices. They should also ensure that their suppliers file their returns on time to avoid any issues with claiming ITC.
The Central Board of Indirect Taxes and Customs (CBIC) has issued a circular to provide relief in cases of GSTR-2A vs GSTR-3B mismatch for claiming input tax credit (ITC). The circular provides a four-step mechanism to address the issue. Here are the details of the four steps:
Communication of mismatch: The recipient will first receive an SMS and email communication from the GSTN system in case of any mismatch between the ITC claimed in GSTR-3B and the ITC available in GSTR-2A. The communication will contain details of the mismatched invoices.
Discrepancy table: The recipient can view the discrepancy table on the GSTN portal. The table will contain details of the mismatched invoices, along with the reasons for the mismatch.
Communication to supplier: The recipient will be required to communicate the discrepancies to the supplier, who can take appropriate corrective action. The supplier can either rectify the invoice or communicate to the recipient why the invoice cannot be rectified.
Reconciliation and claim of ITC: The recipient can claim the ITC in the subsequent month's GSTR-3B, subject to the condition that the supplier has either rectified the invoice or communicated that the invoice cannot be rectified.
It is important to note that the recipient can claim ITC only if the supplier has filed their GSTR-1 and GSTR-3B on time. If the supplier has not filed their returns on time, the recipient will not be able to claim ITC until the supplier files their returns.
The four-step mechanism provided in the circular is aimed at providing relief to the recipients in cases of GSTR-2A vs GSTR-3B mismatch and ensuring proper reconciliation of ITC. Recipients should ensure that they follow the steps and communicate the discrepancies to their suppliers to avoid any issues with claiming ITC.
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